- 4 -
of the case to completion, or the court-awarded fee, whichever
figure was greater, plus any expenses that were not paid by
petitioner. In no event, however, was petitioner to receive less
than 25 percent of the combined award of attorney’s fees and
client award after deduction of expenses.
On December 21, 1993, Local 101 paid petitioner $150,000 in
partial satisfaction of the title VII judgment. The payment was
made jointly to petitioner and her attorneys. Ultimately,
$76,600.75 was retained by petitioner, and $73,399.25, as legal
fees, was retained by petitioner’s attorneys.
Petitioner timely filed her Federal income tax return for
the 1993 taxable year (1993 original return) and reported the
entire $150,000 judgment as “Other income” and reported the
$73,399.25 in attorney’s fees as a miscellaneous itemized
deduction. In 1995, petitioner filed an Amended U.S. Individual
Income Tax Return, Form 1040X, for the 1993 taxable year,
excluding the $150,000 judgment from income, thereby eliminating
the need to claim the $73,399.25 in attorney’s fees. As a
result, petitioner reported that her corrected tax liability was
$437, that she had paid $20,512, and that she was entitled to a
refund of $20,075.
OPINION
Respondent determined that petitioner’s 1993 gross income
included the $150,000 award. Respondent also determined that
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011